Thursday, 12 February 2015

The rise of the bourgeoisie under the capitalist system inexorably meant a change in the existing social hierarchy. Yet, historians are divided on whether the existing ruling classes - aristocracy and the clergy - waned or simply adapted and became part of the business class. Obviously, there are many individual cases to support both theories but, overall, under capitalism the new social hierarchies no longer were based on inbreeding within the same class.

The nobility had already undergone two major transformations when it changed from a warrior class into a courtier elite and when its income became increasingly dependent on financial investments. However its investment in industry and commerce had to wait until the XIX century, when by necessity or interest they began to marry with rich business people and to sell nobility titles to the wealthy.

This mingling with the bourgeoisie was initially resisted and for many years the nobility tried to position itself as arbiter between workers and capitalists or as sponsors of alternative economic systems.

In what concerns the adaptation of the clergy to capitalism, we need to distinguish between Christians and the other religions and, within the first, a fundamental divide between Catholics and Protestants.

For Max Weber and other authors the protestant ethic is often identified with the rise of the spirit of capitalism, by linking moral righteousness with making money. Indeed, the preaching of puritanism was essential to promote the savings necessary for capital accumulation. Concurrently, the proving of one’s faith through worldly activities was crucial to develop the entrepreneurial spirit associated with capitalism.

On the contrary, Catholicism preached resignation, asceticism and monastic contemplation which favoured the preservation of the status quo in the social hierarchy. Rome has traditionally been slow to breakup from existing powers, whether in relation to the acceptance of democracy or the condemnation of Nazism and communism.

Not surprisingly, protestants embraced capitalism while the catholic church, accepted reluctantly the role of markets and advocated a middle-of-the-road alternative based on the corporatist doctrine proposed by Leo XIII in 1891. The failure of this system has not prevented the catholic church from searching for new alternatives, nowadays mostly through a mix of Marxism, Latin American populism and global environmentalism.

Islam, the other big Abrahamic religion, is also generally anti-capitalist despite being founded by a merchant. Curiously, at the time of the so-called commercial revolution Muslim merchants were probably wealthier than their counterparts in northern Italy but they did not evolve towards capitalism. The main reason resides in the sharia law which, despite being favourable to commerce, prohibited joint stock companies, restricts the use of credit, does not accept the rule of law and favours theocratic regimes. Overall, Islamic theologians have been much more slow than the Christians to reinterpret the ancient scriptures to new times.

In India, Hinduism favoured an endogamy caste system which today still continues to be a big obstacle to the development of capitalism because individuals are not free to be professionally or socially mobile.

Buddhism and Shintoism, despite being religions and philosophies who favour meditation over action, did not hamper the development of capitalism in countries like Japan and South Korea, once their feudal systems and the emperor’s divinity were abandoned. Indeed, many entrepreneurs adhere to Buddhism as a relaxation and productivity-enhancing technique. Remarkably, these countries managed to keep their family and cultural traditions while westernizing and embracing capitalism.

In China, despite attempts to abolish religion during Mao’s Communist regime, Confucianism, Buddhism and Taoism remained alive and gained a new momentum since the Chinese Communist Party embraced capitalism. Confucian ethics emphasises the importance of the family but is not formally a religion. Unlike biblical religions, the Confucian system has no point of leverage by means of which disobedience to parents could be justified. In principle, its values are not opposed to capitalist principles but it is too early to know if it will impact on the future of capitalism in China.

In general, the clergy cares more about competition between religions and political power than economic systems. Nevertheless, because capitalism values materialism, democratizes economic power and reducesthe importance of political power, the clergy fears that capitalism will lessen the status of religion. Therefore, their preferred position continues to be one of critical acceptance of capitalism or support for alternative systems.

Overall, both nobility and clergy have now reluctantly accepted capitalism as inevitable, but they are not wholehearted about it. In fact, before taking this position, they often supported some of the various failed attempts to find an alternative to capitalism.